International Education Group spokesperson Paul Chalmers said this could be a drastic blow to New Zealand's export education industry.

Mr Chalmers said the new rule would exclude many students who had come to New Zealand to study with a view to staying on, working and settling here.

Very few new graduates would be able to command that kind of income, he said.

He said it might be the intention of the government to put off foreign students, but that was short-sighted because a migrant workforce was still needed.

"New Zealand needs around about 50,000 to 55,000 migrant workers per year. We either breed faster or we ask migrants to come and do this work.

"Ideally they should be skilled, trained in New Zealand and then let into the workforce."

Immigration lawyer Iain MacLeod agreed that the new rules, which favoured skills and experience, could be a serious blow to export education.

But Mr MacLeod said there were always winners and losers with immigration law changes.

He said the focus of the new rules would be on bringing more highly skilled people into New Zealand, which could only be a good thing for the country.

Changes won't fix working conditions - CTU

The Council of Trade Unions (CTU), meanwhile, said the proposed changes did not account for the blow-out in the number of student and holiday visas.

CTU president Richard Wagstaff said the government was acknowledging immigration was out of balance and needed attention, but said the changes would not help New Zealanders or migrants in low-paid jobs gain better working conditions.

"Many migrant workers aren't being well treated," he said.

"When the labour inspectorate does reviews of those industries - such as construction, labour hire, hospitality, retail, horticulture, agriculture and so forth - they find alarming rates of failure when it comes to maintaining basic standards at work."

Mr Wagstaff said conditions would remain poor while there were still tens of thousands of people on student and holiday visas looking for unskilled work.